Japan’s Financial Services Agency To Regulate ICOs To Combat Fraud
Japan’s Financial Services Agency (FSA) is set to introduce regulations on initial coin offerings (ICO) to protect investors.
Citing informed sources, Japanese news outlet Jiji Press reported that the FSA will require business operators that issue their own cryptocurrencies to be registered with the agency. To introduce the regulations, the financial watchdog will reportedly be submitting bills revising financial instruments, exchanges and payment services laws to the ordinary parliamentary session that starts in January 2019.
“In view of a number of possibly fraudulent ICO cases abroad, the financial regulator plans to limit individuals’ investment in ICOs for better protecting them,” the sources said.
In April of this year, a government-backed study group laid out basic guidelines for further adoption of ICOs, including rules for identifying investors, preventing money laundering, tracking progress of projects and protecting existing equity and debt holders. According to the group, ICO issuers should clearly lay out how raised funds, profits and assets will be distributed among owners of tokens, equity and debt. ICOs should also define and disclose a means for tracking the progress of white papers.
“To enable ICOs to be used safely by a wide range of issuers and investors and to be accepted well in the society, more detailed rules may be required,” the group said at the time.